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The New York State Insurance Department's decision to reject recommended increases in Workers' Compensation Insurance premiums helps hold the line on one unacceptably high business cost that acts as a drag on jobs and the economy.

The "0.0 percent" rate change approved last month though, simply keeps New York in the game compared to competing regions.

While reforms launched in 1996 by the Pataki administration dropped workers' comp rates by 18 percent, 8.4 percent and 6 percent over the last three years, Insurance Information Institute figures show that industry competition and reforms in other states have helped drop rates nationwide by 43 percent since 1993.

In neighboring Massachusetts, a 20.3 percent rate cut last week followed a 21.1 percent cut in 1998 -- despite a recommendation by the State Ratings Board for a 31.7 percent rate increase, and the fact that Boston-based Liberty Mutual Group fingered declining workers' comp revenues as one factor in plans to lay off 1,500 employees by year's end.

Here, the New York Compensation Insurance Rating Board had recommended a 12.6 percent rate hike based on claims faced by the industry. But Insurance Department Superintendent Neil D. Levin properly noted that job creation spurred by the reforms has helped increase premium revenues, and challenged the industry to factor state reforms more completely into its rate structures.

Opposition to rate hikes by such state legislators as Assemblyman Brian Higgins, D-Buffalo, shows a welcome awareness of the problems of workers' comp costs, criticized by detractors as a "tax on jobs." The recommended hike also had been opposed by workers' and employers' groups alike, as an increase that would bolster insurance industry profitability without adding to worker protection.

The zero percent change still means New York's compensation premiums remain about 20 percent higher than the national average, a deterrent to outside investment. Proposed new reforms could reduce the state-set rates by an average 24.3 percent and save employers $631.8 million, according to Insurance Department estimates.

Work is still needed, but for now New York at least has avoided a step in the wrong direction.

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